5 ms·

> Plenty of great people around but you have to be very careful who you rent to... This goes both ways. You have to be careful who you rent from, too. Of all

> Plenty of great people around but you have to be very careful who you rent to... This goes both ways. You have to be careful who you rent from, too. Of all the investment opportunities available to people, I'm not particular sympathetic to purchasing property to seek rents.

dmarlow 6y ago
I wasn't in it to seek rents, we were nearly breaking even. It happened to be a place I previously lived in and it was easier to rent than to sell during the great recession.
olivermarks 6y ago
@majormajor Absolutely. People are untrustworthy on both sides. I've had the stress of being evicted by an unscrupulous San Francisco property shark in the past, and also know people who have had to spend large sums to evict sketchy people and then thousands more to make repairs. It cuts both ways...
BeetleB 6y ago
> Of all the investment opportunities available to people, I'm not particular sympathetic to purchasing property to seek rents. If forbidding renting properties to tenants would solve problems, I would be on your side. People will always need to rent. A society has to allow them to without allowing them to be exploited. But once you allow renting, you have to protect property owners from tenant caused damage as well. I'm not saying we're there - we may be far from it. But renting is not only useful, it is necessary.
- 6510 6y ago
  Think lease-to-buy. That way the tenant has skin in the game. MY house was a school project. It was absurdly cheap to build as the construction workers had to pay to build it. If you account for market value the rent paid for the place 4-5 times by now. If you only take the original construction cost + maintenance its been paid for an absurd number of times, so many times over that I don't want to think about it. We can at least lower the rent down to zero over [say] 40 years but it would be more reasonable to make the tenant the owner after he paid for the place 3 times over.
  - asah 6y ago
    The rent would have to increase a lot - why not just take the extra money, invest it and save for a down payment? Much faster than 40 years, tenant can live anywhere and there's no financial entanglement between landlord and tenant along the way.
    - 6510 6y ago
      Rent is always based on what people can pay.
taneq 6y ago
When we talk about 'rent seeking' it's usually not about actual rental of property, which fills a very real need in society. Maybe it's different in other parts of the world but where I live, rent seldom covers the mortgage on a property, let alone all other expenses. The profit, if any, generally comes from capital gains when selling the property (which right now isn't on the cards for pretty much anyone.)
- luckylion 6y ago
  For Germany, the profits usually come from rent itself as well as capital gains, at least in the cities. I'm a member and live in a housing complex owned by a cooperative. The rent you'll pay in this kind of setting is at the lower end of the market, the services you get are at the upper end. Being a cooperative means I own shares, so I get dividends and balance sheets etc. Even with this great (for renters) setup, they still pay out 4% dividends and expand like crazy (not to produce more dividends but to provide more apartments). They could pay out much more than 4% but they don't want to optimize for profit and make it an investment, the dividends are meant to incentivize members to invest/save more than legally required. The place I lived at previously had higher rents and less services. I don't know how much of a profit they made annually, but I'm sure it wasn't anywhere close to 4%.
- benplumley 6y ago
  > rent seldom covers the mortgage on a property Don't forget that "covering the mortgage" involves building the landlord's equity, so it's not as if this portion is lost to the bank while the landlord has to depend on appreciation. If I "only just cover the mortgage" while renting for the entire term of the mortgage on a house that doesn't appreciate above inflation, the landlord still goes from owning 20% of a house to 100% of a house over that term.
  - taneq 6y ago
    True but there are a lot of additional costs (maintenance, council rates, depreciation) to owning a house on top of the mortgage. Again only speaking for myself but I have a small rental property and the rent basically only covers the interest plus expenses.

dmarlow 6y ago

I wasn't in it to seek rents, we were nearly breaking even. It happened to be a place I previously lived in and it was easier to rent than to sell during the great recession.

olivermarks 6y ago

@majormajor Absolutely. People are untrustworthy on both sides. I've had the stress of being evicted by an unscrupulous San Francisco property shark in the past, and also know people who have had to spend large sums to evict sketchy people and then thousands more to make repairs. It cuts both ways...

BeetleB 6y ago

> Of all the investment opportunities available to people, I'm not particular sympathetic to purchasing property to seek rents. If forbidding renting properties to tenants would solve problems, I would be on your side. People will always need to rent. A society has to allow them to without allowing them to be exploited. But once you allow renting, you have to protect property owners from tenant caused damage as well. I'm not saying we're there - we may be far from it. But renting is not only useful, it is necessary.

6510 6y ago
Think lease-to-buy. That way the tenant has skin in the game. MY house was a school project. It was absurdly cheap to build as the construction workers had to pay to build it. If you account for market value the rent paid for the place 4-5 times by now. If you only take the original construction cost + maintenance its been paid for an absurd number of times, so many times over that I don't want to think about it. We can at least lower the rent down to zero over [say] 40 years but it would be more reasonable to make the tenant the owner after he paid for the place 3 times over.
- asah 6y ago
  The rent would have to increase a lot - why not just take the extra money, invest it and save for a down payment? Much faster than 40 years, tenant can live anywhere and there's no financial entanglement between landlord and tenant along the way.
  - 6510 6y ago
    Rent is always based on what people can pay.

taneq 6y ago

When we talk about 'rent seeking' it's usually not about actual rental of property, which fills a very real need in society. Maybe it's different in other parts of the world but where I live, rent seldom covers the mortgage on a property, let alone all other expenses. The profit, if any, generally comes from capital gains when selling the property (which right now isn't on the cards for pretty much anyone.)

luckylion 6y ago
For Germany, the profits usually come from rent itself as well as capital gains, at least in the cities. I'm a member and live in a housing complex owned by a cooperative. The rent you'll pay in this kind of setting is at the lower end of the market, the services you get are at the upper end. Being a cooperative means I own shares, so I get dividends and balance sheets etc. Even with this great (for renters) setup, they still pay out 4% dividends and expand like crazy (not to produce more dividends but to provide more apartments). They could pay out much more than 4% but they don't want to optimize for profit and make it an investment, the dividends are meant to incentivize members to invest/save more than legally required. The place I lived at previously had higher rents and less services. I don't know how much of a profit they made annually, but I'm sure it wasn't anywhere close to 4%.
benplumley 6y ago
> rent seldom covers the mortgage on a property Don't forget that "covering the mortgage" involves building the landlord's equity, so it's not as if this portion is lost to the bank while the landlord has to depend on appreciation. If I "only just cover the mortgage" while renting for the entire term of the mortgage on a house that doesn't appreciate above inflation, the landlord still goes from owning 20% of a house to 100% of a house over that term.
- taneq 6y ago
  True but there are a lot of additional costs (maintenance, council rates, depreciation) to owning a house on top of the mortgage. Again only speaking for myself but I have a small rental property and the rent basically only covers the interest plus expenses.